An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility

Thursday, April 14, 2011

Labour rights - back to the future?

While a lot of the topics we comments on in this blog are usually about either international events or the latest, contemporary developments, it is good to remember that some of the age old issues in business ethics are worth revisiting from time to time.

One of these is fair wages and the right to unionise. In North America these issues are currently high on the agenda as if we were still in the dark ages of capitalism in the 19th century. This was nowhere more surprisingly evident than in last week’s instalment of ‘Real Time’ with Bill Maher. The show took off with an interview of Chesly ‘Sully’ Sullenberger. You remember, the pilot who landed his plane for lack of other options safely into the Hudson River in January 2009, after both engines had been struck by birds. Since then, Sullenberger, with his cool attitude and gigantic moustache not only reminded us what a real pilot should look like, but also became something of a hero.

What is interesting though is what he’s currently using his fame for. Before Congress, some time ago, he focused attention on some of the crucial ethical issues in his industry. The pay of most pilots and airline staff has dropped by around 40% and most employees – including Sullenberger – have lost their pensions when their airlines filed for Chapter 11 bankruptcy – as most large airlines in the US have done.

This silent infringement of workers’ rights has gone on for some time – but has received little attention. One of the big events – next to celebrity campaigning by ‘Sully’ – that did draw the attention to this was the crash of a Colgan Air jet in Buffalo only a month after the New York incident in February 2009. Meanwhile, a PBS documentary unearthed some interesting details, such as that most commuter airlines, like Colgan Air (a subsidiary of Continental Airlines), pay their pilots below a living wage – between US$16 to 20,000! The documentary suggests that one major contributor to the air crash was pilot fatigue and working conditions. The co-pilot, for instance, had to sleep in the airport the night before because she felt unable to afford a hotel in Newark before starting work in the morning.

The interesting ethical issues here clearly point to the need to revisit and re-apply some stakeholder thinking to the airline industry. While customers have seen falling prices in air tickets in the last decades this seems to have largely taken place at the expense of employees. It is somewhat tragic that it took a plane crash killing all 49 people on board to alert the public to these imbalances.

Now, the issue of a living wage is something we often discuss in the context of so-called ‘developing’ countries. But these questions obviously also need to be addressed in many industrialized countries. In some ways, the US ‘leads’ the way here, especially with respect to the big controversy in recent weeks over new legislation, discussed in the states of Wisconsin, Ohio, Florida and New Jersey, which substantially cuts back the rights of public sector workers to organize and bargain collectively with their employers.

Sifting through the US papers these days, it is a little bit like good old class warfare all over again. Union membership, long in decline, is surging: the American Federation of State, Country and Municipal Employees (AFS) has grown from 900,000 to 1.4 million members in the last couple of years.

Academically, it is interesting to see that these bread-and-butter labour issues initially did not have their natural home in the business ethics curriculum. Rather, these things are mainly studied among ‘Industrial Relations’- or ‘Labour Process’ scholars, with their separate conferences, journals and textbooks. With the return of these issues to the fore, it is clearly also time for the business ethics and CSR communities to start looking closer to home. Ahead of the curve here is the Aspen Institute which has launched an initiative on Low Wage Workers. This involves a teaching module for use in MBA courses and a white paper looking at low wage work in the US economy. Let's hope it's the spur for further action that we need.

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Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors best known for our books and research articles on business ethics and corporate citizenship. We wrote the Crane and Matten blog from 2008-2015, offering unique insight on a range of issues from across the globe.

Andrew Craneis Professor of Business and Society in the School of Management, University of Bath.

Dirk Matten is the Hewlett Packard Chair in Corporate Social Responsibility in the Schulich School of Business, York University.